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State Firms Shrink But Profits Stable
China's state-owned enterprises (SOEs) shrank in number last year while maintaining profit margins, the Ministry of Finance revealed yesterday.

In its annual statistical evaluation report, the ministry revealed the number of State firms fell last year by 17,000 on the year 2000 - a reduction of 8.9 per cent.

This was the result of restructuring, bankruptcies, mergers and sell-offs of enterprises, officials said.

The total number of Stateowned and State-controlled enterprises - excluding financial firms - stood at 174,000 by the end of last year.

State firms performed well last year, generating profits of 281.12 billion yuan (US$33.87 billion) - down just 0.8 per cent on the record year of 2000.

The figures are apparently different from those released by the State Economic and Trade Commission earlier this year, which claimed State firms chalked up profits of 233 billion yuan (US$28.1 billion), plunging 1.4 per cent on 2000.

Xu He, an official with the Ministry of Finance, said the disparity may result from different statistical methods used by the commission and his ministry.

The taxes paid by State firms were a sharp contrast to the profits.

Last year, 43.7 per cent of China's tax revenues came from State firms, which turned in 668.26 billion yuan (US$80.5 billion) in taxes, jumping 25.2 per cent on the previous year.

Large SOEs and enterprise groups have played an increasingly important role in the national economy, the statistics report said.

It said 9,000 such firms generated 273.1 billion yuan (US$32.9 billion) in profits - or 97.1 per cent of the total produced by State enterprises - last year.

(China Daily June 19, 2002)

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